Marcus is a buyer who has signed a Utah REPC with a Due Diligence Deadline of April 15. On April 14, after reviewing the inspection report, Marcus decides he no longer wants to purchase the property. He notifies the seller in writing before the deadline. What is the most likely outcome regarding his earnest money?
Correct Answer
A) Marcus receives a full return of his earnest money because he cancelled before the Due Diligence Deadline
Under the Utah REPC's Due Diligence condition, the buyer has the right to cancel the contract for ANY reason before the Due Diligence Deadline and receive a full return of earnest money. Marcus cancelled on April 14, before the April 15 deadline, so he is entitled to a full refund of his earnest money. The buyer does not need to cite a specific defect — the right to cancel is unconditional during this period.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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